April 18 (Bloomberg) -- Developing France’s coal-gas fields would be a profitable alternative to hydraulic fracturing, a practice banned by the government, European Gas Ltd. said.
“Our projects are very robust,” Chief Executive Officer Frederic Briens told a parliamentary hearing in Paris today. Reserves may be sufficient to meet French demand for a decade.
Domestic production of coal gas, which is methane that can be used for energy, is gaining political ground in France where a ban on hydraulic fracturing blocks exploration and production of shale oil and gas. Briens was speaking before a commission charged with writing a report on alternatives to fracking, which French lawmakers outlawed in 2011.
Coal-gas reserves in the Nord-Pas-de-Calais and Lorraine regions “are of a strategic size for France,” Briens said. Output could provide 15 percent of the country’s daily demand and won’t require fracking, he said.
Industry Minister Arnaud Montebourg, a long-time proponent of domestic oil and gas production, has advocated pumping methane from defunct coal mines and sees coal-gas development as one way of keeping a lid on energy price gains.
“The reserves seem very promising,” Christian Bataille, a deputy from the Nord region, said at the hearing. “It could have a real impact on reducing our energy imports.”
EGL’s plans for about 30 production sites and 2,500 direct and indirect jobs have the backing of local government and farmers, Briens said.
EGL would use horizontal drilling from “low profile” platforms to extract gas from underground coal seams, Briens said. Initial tests from three wells indicate the permeability of the coal is adequate to make production profitable at current gas prices.
It may be possible to extract more than 10 billion cubic meters of methane from the northern coal beds, French energy think-tank IFP Energies Nouvelles said in a report earlier this year. Even so, proven reserves are only about 865 million cubic meters so far, the report shows. Annual French gas consumption is about 50 billion cubic meters.
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